Japan – TEPCO in Japan has finally called for outside help. Even Greenpeace is on the ground saying their readings differ from TEPCO’s (science over politics) Common Dreams web site has a fascinating  real time tweeter updates TEPCO admits protracted and uncertain operation to contain crisis. Here the short version of the best video yet on the tsunami

Taxes –  GE made $14.2 billion in profits last year and over $5 billion in the USA. Guess how much they paid in taxes last year year Wait for it, Wait for it,  Wait for it – ZERO.  Now remember your taxes are due by April 15. Only in America

Financial Reform – Seems that virtually all Republicans and some Democrats are doing everything possible to make sure that those too big to fail shadow banks that destroy the meager measures the Dodd/Frank Bill put in place. The NYT’s lead editorial yesterday

Libya – This call may be premature, but it looks like after the allied/UN air strike many who supported Ka Daffy are changing sides. At least his army in the eastern 1/2 of the country has melted away. Al Jazeera reports no resistance to rebels in his home town. Huffington Post live blog

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KISS & Stocks

(Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Here’s the chart that demonstrates what Investors411 has been saying  since last year and why the Bulls Rule in our liquidity driven Fed manipulated stock market. (I realize most of you are sick of me saying the above again and again, but NOW is the opportunity to profit from this)

• This chart was done by Kevin McCElroy from Seeking Alpha.
• Want to know more? – Impact of POMO on Dollar by LFB from SA

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Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

BUBBLE-ICIOUS - Investors411 term for the stock market – We are all riding on the outside of an ever expanding &  Central Bank manipulated liquidity stock bubble. See Investors411 STRATEGY section for more

• Another weak volume liquidity driven manipulated rally on Friday.
• On the surface it looks like the rag tag exuberant bunch called rebels in Libya are winning, because oncee air strikes clobbered exposed military units resistance became almost non existent – For stock = bullish. For oil = Bearish For Ka Daffy = Bearish
• Black Swans (Big event bad news) everywhere. From John Nyaradi on this week’s outlook in stocks. Remember bad news is more often than not an elixir for stocks because it means a stronger possibility of more quantitative easing.

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Shorter Term Forecasting Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks]   The dollar rose significantly +0.74% Bearish longer term pattern still in place, but we have started a three day bull run For stocks = Bullish/Neutral
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO rose to +24.38 Getting oversold. Over past three months The MO has had problems getting over +30 = Bearish /Neutral

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Reading The Tea Leaves

The Bulls have had a stellar 7 day run in weak volume. (weak volume rally= calling card of a liquidity driven manipulated market)  They are starting to come up against some technical resistance that may slow them down – A rising dollar and the MO nearing overbought levels. “Merger” Monday  has historically been the best day of the week. If Ka Daffy supporters don’t have the stomach for a fight you could see rally continue. The however  perversely good news (lower oil prices if Ka Daffy looses) may turn out negative because it would mean less of a chance of QE ##

Short term rising dollar and oversold levels should hold bulls back this week.

War room

Every major group of traders is sitting in their war rooms discussing the end of QE #2 (quantitative easing) and how it will impact markets before/on/after June 30th (ending date)

Will the Fed do a QE #3? Since we have over 3 months till this happens bulls should rule unless too many traders front run what they perceive is the end of quantitative easing. Frankly, there are whole mess of investors out there who believe there will be a QE #3.

So best read of tea leaves is still bullish till June 30th. More low volume rallies. (see chart above)

What to watch today

• USO - ETF for oil - Oil up = stocks down - Now back above $100. - Headlines from Libya.
• UUP - (Tracking ETF for dollar) Remember - The dollar is a contrarian indicator. Bad dollar = good stocks
• AAPL – Trading below 50 day MA is bearish.
• Japan Rector Developments

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Positions

UWM – - Sell order  for original UWM position is a 5% trailing stop

ETF’s currently Under Consideration.

EWV for those who love risk is the ETF that is ultra short (2x) Japan. Problems there are under estimated and/0r covered up.

UCO -(2x oil prices) Why not, its also a hedge against higher gas prices. - approaching highs of last month & 2010 – I do own this ETF in other accounts and have sold covered calls on some of it.

REMX (Rare Earth ETF) - Really believe this a good long term holding. Dipped in front of a strong resistance level.

DGP – (ETF is 2X gold)also SLV (silver). Breakout on worries of future inflation – Gold is moving inversly to the dollar

DBC - (Commodities ETF) For a more complete list of commodity ETF’s see POSITIONS listed at top of blog  DBC is tilted to energy.  A good alternative would be DJP that is more agriculture and metals -

RJA (Agriculture commodities Index)An ETN, not an ETF.

UWM (2x small cap stocks) TNA (3X small cap stocks)

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See “POSITION“ section of blog (at top of page) for lists of potential stocks & ETF’s including “YOUR Stock List.”

Your Stock List seems to be turning the corner and has 5 breakout stocks

3 of the 4 major indexes are above their 50 DMA’s and the NASDQ is sitting on its 50 DMA.

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Crunch Time/Elizabeth Warren

Perhaps the best result of the Financial Reform Legislation could be  a strong Consumer Protection Agency. Over the past few years Investors411 has beat the drums for the stand and policies of Elizabeth Warren. She would be an ideal choice for the agency, but has strong opposition from influential Senators like Democrat Chris Dodd (He approved the big financial bonuses for bailout TARP shadow banks) WaPo thinks there is good shot she will get the job.

Matt Taibbi

The Rolling Stone’s Matt Taibbi has an excellent editorial on “Wall Street’s Big Win.” The win, of course, is the new financial reform package that became law. Taibbi nails Republicans and Democrats (including Dodd) who gutted financial reform legislation.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Individual companies may be doing well, but earnings season is basically over. The focus now turns to economic news and from China to the USA (talk of GDP growth being revised down in USA from 2.4 to 0.2 in 2nd quarter) the news has not made investors happy.  We’re not falling over the cliff, but even the BB/HFT traders need some series of economic fundamentals to hang their hats on.

Therefore, don’t see bulls getting out of the corral until the market becomes more oversold.

Same story of bigger volume on down days that has been the hallmark of US indexes for many moons.

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant] The dollar rose 0.42% yesterday. This confirmed a massive +1.84% move the day before. Very bullish for the dollar but for stocks = Bearish
• The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] Rally +2.48% yesterday. Has broken up through 50 day moving average & upside momentum slowing. Overall trend  = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -38.98 Approaching oversold, but still = Neutral

Reading Tea Leaves

The dollar is the key index to watch. The larger currency market is almost  dictating what happens to US stocks. You can follow (or invest) in it by watching the dollar bull ETF – ticker symbol UUP. If UUP goes up, stocks go down and visa versa.

The dollar closed at $82.64 and the first significant resistance level is the 50 day moving average at $84.06 ( 50 dma is falling each day). So there is a ways to go before we reach this point.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - NONE

From earlier this week - “The Bulls seem to be loosing control.” The MO has fallen to -39 & we are approaching the -60 oversold level.  The lower the MO goes the better the chances whatever long position you take has of making at least short term gains.

A number of you have asked or are investing in stocks with high dividends.  This gives you a second revenue stream – the dividend that is in some cases higher than what you can get in CD’s. The problem of course is will the stock go up or down. Here a list of top ten dividend stocks from an author in at Seeking Alpha.

FXI, EWZ, EEM, EWY, & EWS are the courty ETF’s recommened for consideration when conditions are appropriate. Also GLD on dips.

Also considered are ETF’s that mirror or do 2 or 3 times what major indexes do.

YOUR Stock List last generated on this date (scroll down) Have not gone over these recently.

More agressive traders could start to buy the dip. Longer term investors may want to wait for stocks to move lower.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Not Fit for Democracy

It seems that our brains are hardwired against democracy. “It’s one of the great assumptions underlying modern democracy that an informed citizenry is preferable to an uninformed one” A truly fascinating article in the Boston Globe about how the mind works by Joe Keohane concludes-

When misinformed people, particularly political partisans, were exposed to corrected facts in news stories, they rarely changed their minds. In fact, they often became even more strongly set in their beliefs

This is why appeals to emotionalism, hatred and fear  in politics and with media sources that the moneyed class own works so well. Rush Limbaugh, Glenn Beck, Fox news, the Tea Party Patriots, Sarah Palin etc. all embrace this emotional bias and hatred. They keep pounding on it day after day. 20 years ago news casts used to report and analyze facts. Times have certainly changed. (See Popeye in comment section of blog)

Now It Gets Interesting

It seems that shadow bank lobbyist were able to to gut or seriously water down the Volker Rule, The Lincoln Derivative amendment and almost all of meaningful bank reform, but they forgot or overlooked the Kanjorski Amendment. I never heard of this amendment before either, but Simon Johnson has – “In essence, Kanjorski proposed that a group of 10 federal regulators be given the explicit power to break up big financial firms when they pose systemic risk.”

Now the fun begins –  two Republicans have said they would vote for the bill two democrats against – Senator Feingold (D) does not think it does enough.  The bill does contain a consumer protection agency. Imagine that – something to protect you and me the consumer. More

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Mantra for week Earnings Season begins this week. – How markets react to news Will be key. If a stock shrugs and goes nowhere on good earnings news you know theirs trouble ahead. Remember Black Box algorithms  dominate even more as volume declines.

Pathetic volume  & flat market. = Neutral

Alcoa (AA) reported last night and slightly beat expectations – How the market reacts to this news is VERY important. Are slightly better than expected earnings built into stock prices? Will find out today with AA. Futures trding up = Bullish

A downgrade of Portugal’s debt did not hurt stocks yesterday – Bad news not hurting stocks shows that it is already built into market prices or expected by investors. = Bullish

The MO (see below) fell 20+ points yesterday. This gives bulls between 30 and 50 points to move higher on the MO before encountering resistance at +60 to +80. Translation another 2 to 4% move higher in the benchmark S&P 500 s possible before resistance is encountered.

Significant Indexes-

• McClellan Oscillator (MO) fell to +32.57[+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. This index is just a wee bit overbought  = Neutral
• US Dollar –  The dollar rose +0.31% Friday [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, that make up to 80% of all trades, have used the inverse relationship of the dollar as a key part of their trading system. The big move was breaking the support level two Friday’s ago which set up the rally for stocks. The swings in prices are smaller, but growing and therefore right now = Less Relevant
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China) BDI is in free fall from a high of @4200 to  1840 Monday. This is a huge -56% drop in 7 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell a decreased -3.26% yesterday. Rate of decline increased yesterday. = BEARISH

The dip in the MO & the good reaction to bad news (Portugal) means that the bulls are back for another run higher.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own - Updated over weekends – Investors411 holds NO position at this time. (see below)

Unfortunately, for us, the MO fell 20+ points. Bringing it down from almost overbought territory. The more overbought the better time to invest in one of the short ETF’s. Right now our best opportunity is to go short in an overbought market – However conditions are not yet appropriate

We missed a chance to go long when the MO went below -50 and  I hope we did NOT miss a chance to go short when the MO was above +50.  The area around +/- 60 has been our go long/go short point. Obviously this line is NOT written in stone. – Only time will tell – But be patient - There will be lots of opportunities to go long and short this year

Here’s a list of some Proshare and Direxion ETF’s that short sectors/indexes. You can find a much more complete list clicking here and scrolling down until you find each funds name and LINKS.

• SDS - @200% short the S&P 500
• QID – @ 200% short the NASDQ (basically tech stocks)
• SH – Short S &P 500
• FAZ – @300% short financials
• TYP – @300% short  technology
• EPV – @200% short Europe

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Robert Kuttner

Financial Regulations

D. In the comments sections brings up a generally favorable view of the Financial Regulations in the NYT. Here’s another glass is half full view from left wing TalkingPointsMemo. This is certainly, the most significant financial reform package in decades but it does NOT solve the major Too Big to Fail and transparency problems. Nor does it address problems within quasi government institution – Fannie and Freddie that are singlehandedly holding up the US mortgage market. That comes next.

Also much of what is legislated depends on regulators. Tea Party Patriots ‘s basically want NO regulators/regulations and the Obama administration has a far less than stellar reputation in regulators and regulations (think BP)

In a past Investors411 the Baseline Senerio revealed 4 largest shadow banks have $7.7 trillion in assets. Imagine what happens if a $2 trillion dollar over leveraged shadow bank goes down – one 5 times the size of Lehman Brothers. Simon Johnson, today, explains how JP Morgan has made itself invulnerable to financial regulation

“The reason global megabanks will get bailouts in the future is simple – policymakers will fear the chaos that would ensue when competing bankruptcy claims swarm over a defaulted institution, much as happened for Lehman (e.g., in London) in September 2008.”

The fact that Shadow Banks lead the markets higher Friday is verification that investors (those who put their money down, instead of talk) think shadow banks won.

America Speaks

America Speaks is a “bipartisan” organization that organizes American town meetings. It just had major Town Meetings across the USA on June 26th. This group was founded by a Wall Street mogul and two foundations. They “scientifically selected groups” came up with some “overwhelming” eye brow raising results.

• Raise tax rates on corporate income and those earning more than $1 million.
• Reduce military spending by 10 to 15 percent,
• Create a carbon tax and a securities-transaction tax

Bob Kuttner also goes into depth on America Speaks and Jobs Jobs Jobs.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Mantra for week - ” Any analysis of stocks has become an analysis of what the “Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.” They make up 80% of trading and right now the huge currency markets are dictating their moves.

The Upcoming Battle-

Friday’s Investors411 Outlined the sides in the Upcoming Battle. Stock Market /Currency Trading War Broke Out Friday. Major US markets had  an above average big, increased volume day - so both sides committed lots of troops (buyers and sellers) to the fight. There was lots of blood

The green army (long stocks & short the dollar) launched the first attack – led by Shadow Banks GS & JPM (the whole banking sector rose almost 3%) The dollar took it on the chin and is now sitting a mere $0.24 away from its rising front line/support level.

The red army (short stocks & long the dollar) got caught a little off guard, because so many technical analysts predicted the downfall of stocks. Despite being beat back as the dollar fall (see below) and stocks pushed marginally higher the red army support levels have held.

The MO is NEUTRAL. The BDI has turned flat So No advantage for either side here. In fact BDI’s possible turn slight advantage to greens

For fundamentals details of last week and this week see Jeff Miller in Seeking Alpha or on Friday’s monthly jobs report ( the big news of the week) and another outlook by SA’s Ophir Chandor

Fearless Forecast for the Week

Just about every technical analyst out there is bearish for stocks. However if bulls (the green army) can build Monday on Friday’s modest gains in big volume then they have a shot at moving markets higher. Last week too started out with China announcing a currency devaluation, only to learn that this was no wher near as substantive as first though.

The Shadow Banks victory in financial reform should help bulls.

Housing figures are in shambles. Investors411 mantra over the last two years has been the economic worldwide situation created by the US Shadow banking 2008 meltdown is “far far far far” worse than expected. Logic says that Friday’s employment numbers will be worse than expected. Bears should growl.

The Shadow Banks have reinforced the bulls and if they can get a follow through rally today this could help stocks for the week.

The key again is the US Dollar/EURO relationship. UUP (ETF that tracks the dollar) is the key to watch. Since there are so many expecting markets to tumble, if the Dollar breaks through support you could see a sharp rally as Black Box investors “buy to cover their short positions.”

Happy to be on sidelines for this war. Best read of tea leaves is a contrarian up/flat week into lackluster jobless figures.

Today is day 2  of the dollar falling to a key support level war. Day 1 was dominated by the green army.

Significant Indexes

• McClellan Oscillator (MO) rose significantly to -1.34 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works.= NEUTRAL
• US Dollar –  The dollar fell s yesterday -0.57% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. The dollar has fallen for the last 3 weeks, but has consolidated (traded sideways) over the last 6 days as the 50 day moving average/support level moves higher. This is where the Black Boxes have focused their attention. Dollar at $85.28 directly above major support/ 50 DMA at $85.04. Friday’s drop = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2501 yesterday. This is a huge -40% drop in 6 weeks.  Often a leading indicator for stocks. Now at/just above a major support level. Rate of fall declined again yesterday. This index often makes slow changes, so diminished decline  could be the start of a reversal. However, clearly long term. (decline from 2502 to 2501 is smallest possible)  = Long Term Bearish Short term Bullish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekends

Have not yet had a chance to Update over last 2 weekend but there are NO positions held at this time.

Still watching DGP (ETF that’s double long gold) for a dip close to its 50 DMA) – Will buy.

Don’t plan any buying or shorting (ETF that short the market) until MO reaches overbought or oversold

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

The list of photos above on financial reform was from Dylan Ratigan’s MSNBC show. Obviously you can add to list.

Financial Reform DOA

Simon Johnson and the folks at the Baseline Senerio have thrown in the towel on financial reform. Virtually every Republican caved into the shadow banks lobbyist, but the real disappointment - so did Obama, Geithner and Summers and many Democrats. It’s disheartening to read that the Obama administration helped kill Kaufmann/Brown legislation and other substantive reforms.

There may be a few crumbs that the shadow financials have lost, but opaque casino capitalism where your FDIC dollar in banks insures their trading of highly leveraged derivatives will thrive – Privatizing gains and  socalizing losses continues. Shadow financials, obviously would rather trade derivatives than make less lucrative transparent loans to homeowners and buisnesses.

The shadows of over leveraged, opaque, Casino capitalism will thrive in the coutry that is/was the leader of the free world. For the future, let’s borrow a line from Shakespeare’s Macbeth- Something wicked this way comes

Tea Party Patriots and Deficits

Deficits are bad. No question. Building a future on growing debt if you own 50% of the worlds weapons leads to one of 2 things – You bankrupt the future, or you kill your debtors. I suppose you could find a third way where you hold a gun to the head of a debtor, but after a while somebody’s going to kill somebody. – Again – Something wicked this way comes

However,  Before you worry about your debt you have to worry about the soundness of your financial system and keep it from collapsing.

• Fixing financial problems and giving us a fundamental transparent capitalism would enable real transparent, democratic, economic, growth.(see above)
• Increasing debt to keep our financial system (even though it was/is a shadow system) from collapsing and creating a second great worldwide depression was more critical

This is what TPP’s can’t understand. We’ve prevented a worldwide economic meltdown, but we haven’t fixed the system. These two priorities are the foundation of economic growth and therefore supersede deficits.

You want to cut military spending, put a means test on social security/medicare, raise taxes to what they were under Reagan – great. It will cut deficits.

However cutting the National Endowment for the Arts, cutting funding for some pork project, screaming drill baby drill is NOT going to decrease the $13 trillion deficit in any substantive way.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

The news that China was devaluing its currency announced over the weekend got sharply tempered. As uncertainty over the China move grew, so did the dollar and the algorithms used by the “black boxes” that control 80% of stock trading kicked in and sold stocks. A triple digit Dow gain faded into a loss = Bearish

This is hardly the first time the Chinese and economists have sharply tempered a government statement about devaluing currency. Let’s take that feather (for now) from Obama’s/Geithners cap and wait to see what happens as the G 20 nations meet.  This also toasts the Fearless Forecast for this weeks trading.

The reversal in the dollar (See below) could mean an overall change in market outlook, especially if the dollar moves higher again today. Today would be confirmation day of the dollars move higher yesterday.. Right now the major institutions  that run the markets have set their stock market algorithms to currency fluctuations.

FXE – The ETF that tracks the Euro sure looks like its starting to turn and head lower.

Bottom Line – The one way to put the odds in YOUR favor that has a reasonable chance at success in stocstoks/ETF’s is to use the MO. The higher it goes the more you sell, the lower it goes the more you buy. Obviously NOT a hard an fast rule, but a good general guide. Currently, as explained above, currency fluctuations are dominating trading.

Significant Indexes

• McClellan Oscillator (MO)fell to +35.08 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. Clearly more overbought than oversold, but has pulled back from overbought levels.
• US Dollar –  The dollar rose yesterday +0.43% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. Yesterday – “The dollar seems destine to fall to its 50 day moving average which is $1.06 lower and rising.” The dollar fell to within 0.39 of its 50DMA to $85.01 then rallied a significant +0.94%..  This was the largest gain in the dollar in 11 trading session. For stocks = Bearish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped is in free fall from @4200 to @ 2600 yesterday. This is a huge -38% drop in  Often a leading indicator for stocks. Now at/ just above a support level. Clearly long term  = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over last weekend.

ETF to watch today is the China ETF - FXI – up +3.48% yesterday. The stock from Your Sock List is China’s BIDU

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Apologies to some of you who are trying to post comments as “guests” – It’s NOT working and  only “registered users” are able to make comments. Trying to work this out.

Tea Party Patriots

Reality is that Tea Party Patriots and like groups are a major force in the USA and many of YOU have commented on their right wing radicalism, racism, and rage. NYT’s Frank Rich & Talking Points Memo . The TPP hero’s have taking some truly radical views defending BP.

• Rand Paul defending BP wanting Obama to leave them alone.
• Joe Barton (Republican chair of energy committee in congress) calling the $20 billion Obama got from BP a “shakedown.” He later apologized.
• IBD (Investors Business Daily - “Rallied to  his(Barton’s) support.”), Rush Limbaugh (“the $20 billion would go to ACORN”) Republican Study Committee = “A Chicago style Shakedown.”

To the TPP’s everything is the fault of a big monster government. So much so that they would rather see YOU pay for BP disaster.

Just what is does our government do – Primarily writes checks to seniors (social security & medicare) and fight wars. (65% of federal budget and growing) Just who elected our democratic government  (20 of the last 30 years Republican Presidents)we did. Yet the TTP’s rage against government they elected as the source of their problems  - You self indulgent, arrogant  IDIOTS – the problems we have are our own making -our own fault. Take responsibility.

TPP’s are all wrapped up in sensationalism from Palin’s “drill baby drill,” to their “don’t tread in me” banner. When the TPP’s heros take a position on BP you find out just how dangerous they would be. Do NOT ignore these people.

China Revaluation

Stocks all over the world are up on news that China is loosing currency restrictions. This avoids or lessens the tensions a potential trade war with the USA. It’s a long sought goal of US foreign relations and a feather in Geithner/Obama’s cap.

If you combine this with Obama getting $20 billion from BP you could say he’s having a good week. (more on tis below)

However, no matter on how tough Obama got with China & BP his lack of support for substantive regulatory reform on the too big to fail shadow banks is a major disappointment

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Friday was one of the most boring options expiration days ever. Usually a Quadruple witching day/options expiring means a HUGE amount of trades and a volatile market.

BIG story over weekend is China Yuan/currency has moved to a 21 month high. Bush & Obama have been pushing the Chinese to deleverage their currency from the dollar.  Looks like Obama, time & a win win situation finally moved the Chinese. Since the “Black Boxes”(see Thursday’s update) that make up 80% of the trading are fixated on a falling dollar this is going to give bulls a shot of adrenaline today = BULLISH

BDI in freefall. At some point the Black Boxes (Huge computers of Huge institutions that make up 80% of all trades) are going to notice the BDI whichis a proxy for world trade. World trade is Slowing and the  first impacted are highest exporters like China, Germany, etc.= Bearish

Fearless Forecast Last Week = “Rally Ho” We held onto gains made early in week.

Fearless Forecast This Week = Rally Ho Again – China news is extremely bullish and this surprise should boost markets above +80 on the MO scale. Conditions should be getting very oversold by the later 1/2 of week. So expect the rally to dip or flatten then.

The China news is a significant positive surprise. After years of just talking the Obama administration has got China to move. Unfortunately the news has caught us with just a small stake in equities, so we’ll miss out on what should be a big jump this AM in equities.

Significant Indexes

• McClellan Oscillator fell to +50.47 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. Just below overbought territory = moderately overbought = moderately bearish
• US Dollar –  The dollar continued its fall Friday -0.10% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. The dollar seems destine to fall to its 50 day moving average which is $1.06 lower and rising. = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped is in free fall from @ 4200 to @ 2700 Friday. The China news could impact this index today Often a lagging indicator, but clearly long term  = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over weekend.

High beta stocks (See YOUR watch list) and high beta ETF’s (see past Investors411) going to do well early this week on China news. Could be a good short term buy the dip play here. Be careful that your choice is NOT too overextended from/above its 50 Day moving average.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Bears Rule

The World Has Changed

We, had a huge shadow financial meltdown in the USA. A massive fiscal response that held up markets worldwide and prevented the second Great Depression. Now, the PIIGS in Europe, who like the USA created massive over leveraged debt, are melting down. The contagion is spreading worldwide.

The root cause, obviously is no checks and balances on casino capitalism which has led to over leveraged massive debtor countries (including the USA) falling even further into debt and continuing their huge opaque financial structures We have not yet fixed the too big to fail or over leveraged problem in the USA. Some consequences from the changing wolrd:

• GDP worldwide is going to fall
• Jobless rate in USA and other debtor nations going to grow.
• If casino capitalism or “free markets” continue to run wild the situation will worsen.
• BP disaster is just another example of unregulated casino capitalism and no government enforcement.
• Democrats are in Huge trouble because they lack a coherent national leader who backs Main Street.
• The EU is structurally damaged as is the USA
• The core issue of too big to fail shadow financials could rip the financial structure of the world into another Great Depression.

KISS & Too Big to Fail

Giant over leveraged shadow banks are FDIC Insured. Shadows take your $, plus printed $ from the Fed & invest it in opaque, over leveraged shadow investments. Once you allow this over leveraged situation to occur on a debtor nation (latest example Greece) putting Humpty Dumpty back together again is a nightmare.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Huge decline in significant, increased, above average volume. This looks like the beginning of a parabolic move down. Similar to the one in 2008.  Another day of selling like the last and you’d have technically a climax sell off. Then maybe some stabilization. = BEARISH

Far more than the 200 DMA has been broken on the benchmark S&P 500. Virtually all technical trend lines that show bull market momentum have fallen for all major indexes. = Bearish

Sell off accelerated into close and European markets again lower this AM. = Bearish

Dow is now off 10.5% from highs. Historically a 20% correction = a new Bear market

Today is a confirmation day of yesterday’s fall.

It’s going to take a while to sort out things in Europe and many are betting that the debt Crisis will sink the European Union. Problem in a nut shell is China, Germany & petro countries are big exporters and the rest of the world is over leveraged creditors.

Significant Indexes

• McClellan Oscillator fell to record lows -136.21 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is OVERSOLD territory. = Bullish  Hate to say this, but once the trend broke this index has become less effective.
• US Dollar – Yesterday the dollar fell to $85.81 Down a significant -0.54% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important . . Obviously European & other Central Banks are stepping up to buy the Euro.  Looks like this will stabilize the Dollar/Euro relationship at least for now. = Bullish.
• VIX- The “fear” index is at 45 and back in Oct. 2008 it reached 90. We have a ways to go before we reach 2008 fear levels.

Stock markets are totally ignoring their record oversold conditions and the drop in the dollar. Major trend lines have been broken. Bad reactions to good news is a powerful warning sign that the worst is yet to come.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Have not had a chance to update the positions section of blog yet. Will update last weeks trades over weekend. All losses under 10%, some gains but its not pretty.

Sold remainder of UWM & ICON at yesterday’s open. Also 1/2 of ESRX & 1/2 of IMAX at open yesterday – most for losses (except IMAX). Positions below. Everything else has been sold last week or this week.

Positions  -

• 2% IMAX
• 1.5% ESRX

Just on a technical basis, another massive sell off in increased volume & Investors will buy back IMAX & perhaps ESRX or another stock that has held up well over the meltdown.

From yesterday – Any close below the 200DMA on the S&P 500 will change outlook to CAUTIOUSLY BEARISH We came close yesterday.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Admiral Sestak (above) beats 30 year incubate Specter in PA Senate Democrat race

Incumbents Get Toasted

From TalkingPointsMemo.com a rundown of last night’s election across the USA. In almost every case incumbetes lost or did far worse than expected (D – AR.). The only exception is in PA – 12 John Murtha’s old seat where Democrats had a bigger than expected victory over Republicans for the congressional seat. Ron Paul’s son won Republican primary in KY.

Both the far left and far right (Ron Paul) are supporting Teddy Roosevelt like changes to Wall Street.  Libertarian, Ron Paul on the far right wants us out of the MidEast (and other areas our troops occupy) far more than any other Republican and most Democrats.

Republican’s Blocking Financial Reform

The following comes from Left wing Huffington Post. Republicans blocking Three Major Financial Reforms

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Its all about the Dollar. The dollar rose a HUGE +1.07 % and consequently stocks took it on the chin. Dollar is at 87.11 and close to major resistance at just above $88.  The McClellan Oscillator is in oversold territory at ironically the same -88. We sent a record at -123 a week back.  This probably means we could fall another 2 to 4% at on the major indexes before technically a turn becomes almost inevitable.

At some point in time this year stocks will reach +60 on the McClellan like they did almost 10 times last year.

Germany made a solo move and banned naked short selling (a good move , but a lack of coordination with Euro bad) Story = Bearish

All of this is about the European stability and survivability. If this EU falls so does the worlds largest economic zone. (yes its slightly bigger than the USA) The good news for Europe is the lower the Euro goes the better it is for their exports

Significant Indexes

• McClellan Oscillator fell to -88.08 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is OVERSOLD territory. The lower this oscillator go the more oversold markets become. -123 was the multi year low over a week ago.  Bullish
• US Dollar – Yesterday the dollar rose to $87.11. (sorry for misprint yesterday,dollar started the day near 86) Up +1.07 [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important . The area around $88 is a major resistance area/ multi year high for the dollar.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Have not had a chance to update the positions section of blog.  No buying & selling yesterday.

We are deeper into OVERSOLD territory, McClellan at -88.08 = The momentum on the downside is strong. It looks like we will reach or approach -123 again.

Our top two stock positions IMAX & ESTX are holding up quite well. Others are at or approaching the prices they were bought at.

Still own 5% position in UWM. Stopped out for 2% loss on other 5% Still looking at situation as an upcoming drops as buy the dips.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Hope symbol from Iran’s Green Revolution – See Iran quiz below

Financial Hypocrisy

Investors411 has thrown a lot of venom at deregulated, over leveraged, opaque, Shadow Banks. However, the reality is the Pied Piper that led the Shadows down their path is a conglomerate of US politicians.  These same politicians are the ones who have been spanking Goldman Sachs and attempting financial reform.

The head line on lefty blogs is something like Republicans Filibuster on Financial Reform Crumbles. However Popeye in the comments section of the blog recognizes the enormous conflict of interest the leading Senate Democrat Senator Dodd (Chair Financial Committee) has. What good is breaking the filibuster if the end result is going to be milquetoast?

Tuesday, Investors411 referenced Luke Wilson’s (from Seeking Alpha) grading system for financial reform Today Peter Schiff (Yahoo Finance) Slams the Senators trying to reform the system.

Iran Quiz

On June 14th 2009 Investors411 began along  series on Iran’s election results. “Democracy Hopes and The Dictator Replies.” The dictator, of course was holocaust denying Ahmadinejad &( supreme leader) Khemenei. The whole world watched in horror as the dictators slaughtered innocent demonstrators in the Green revolution. Obviously Iran is the #1 country in the world you’d least likely want to see have nuclear weapons.

In the USA many stereotype, fear monger, and over generalize – Examples – All Arabs are the same, Let’s go war against Islam, The only good Muslim is a dead Muslim.  So lets take a pop quiz.

1. Is Iran an Arab country?
2. What percentage of students entering university in Iran is female? (be within 20% of correct answer)
3. What percentage of the Iranian population attends Friday prayers? (be within 20%)
4. What percentage of Iranians in 2008 said they had an unfavorable view of the American people? (be within 20%)
5. True or False: Did Iran considered the Taliban to be an enemy after the 9/11 attacks

I’ll Publish the results later today in the comments section of the blog.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Markets recovered a small portion of the previous days losses in decreased volume = Neutral/Bearish

The Fed came through – held interest rates and issued basically the same we are going to keep interest rates low a long time statement. This plus a ever so slight improvement economically had the support of all but one Fed governor who also in the past has been somewhat more aggressive in raising rates.

The big news was still the Greek debt crisis. Massive indecision over what the future holds – See the dollar below. = Bearish

XLF - The Financial sector ETF is the indicator to watch as Senate begins to debate Financial Reform. XLF is dominated by the big shadow banks – If it goes down that means financial reform is going to force transparency and actually make a significant difference. If not the shadow banks and their lobbyists have won.

The XLF could also be impacted by the widening Greek debt crisis.

We’d need some continuing bad news on the spreading Greek debt to stop the bulls. When all is considered (Yields on 2 year  Greek bonds are 20%) the fact that major US indexes are a few points off their highs is remarkable = BULLISH

Stimulus packages across the world, emerging markets improving GDP are still driving markets higher. = BULLISH

Significant Indexes

• McClellan Oscillator rose slightly to  -24.82 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is  NEUTRAL territory, but we are closer to oversold than overbought.
• US Dollar – broke out to a new yearly high yesterday. Up +0.24% yesterday. The trading range was a huge 1.75% This indicates huge indecision. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Is very important.  Dollar closed at $82.33. This high is virtually entirely due to problems coming out of the Greek debt crisis. Rising dollar almost always + falling stocks.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

Waiting for a lower reading in the McClellan to invest. Although for traders who can tolerate the risk (not longer term investors) a -25 is better than 0. A risky buying window is open. Long term  Investors should wait for more oversold conditions. .

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Wall Street 1867

Grading Financial Reform

From Seeking Alpha (this financial site does some independent thinking and has almost 459,000 members –  including me) This is a really good analysis by Linus Wilson. It covers major points and gives grades.

• Resolution Authority
• Derivatives Authority
• Ratings Agency Reform
• Bank Tax (extra credit)
• Breaking Up the Big Banks (extra credit)

Senate voted not to debate on party lines so fillabuster held. One Nebraska senator wanted a special exemption for WarrenBuffett’s 65 billion dollars of derivatives.  Buffett called derivatives financial weapons of mass distruction.

Conservative David Brooks at NYT has a differnet take in his editorial today “Dumb but decent meets smart and sleazy in the Washington drama over how to prevent another financial meltdown” on GoldmanSachs

YOUR STOCK LIST

Lots of Winners last week

This list has been developed by YOU sending in your stock picks, we discuss them individually (usually by email) and if they are trending positively andare liquid they get included in YOUR list. Thanks to many of you who have sent in choices. If you payed attention to the List published on each Tuesday or Wednesday, you’ll find a lot of winners

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Eyes are turning to the Fed announcement on Wednesday -Will they in some nuanced way change the language of their statement on interest rates?

Nothing extraordinary in volume and/or market moves yesterday.

Ford seems to have done wellwith its earnings report. = Bullish

GS in front of congress = Bearish

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Significant Indexes

• McClellan Oscillator fell  to +7.47 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is  NEUTRAL territory
• US Dollar – fell slightly -0.04% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules Is very important. Remember, dollar down almost always = stocks up and visa versa. Dollar in middle f consolidation.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

YOUR STOCK LIST

Caution- This is mostly just technical analysis and lots of other factors enter into a decision to buy or sell

Caution – We are in the middle of earnings season and a bad or good earnings report can move these stocks @2 to 10+% Many of these stocks are moving in anticipation of or reacting to earnings reports. This has to be considered before you buy/sell

• Last Week’s comments in black.
• This week’s violet.
• Ticker symbols are links to charts.
• A Line means stock is in danger of being taken off list.

If you have trouble with terminology email me. 5oDMA = 50 Day Moving Average – blue line on chart.

Well aware that most of you are looking for longer term buys. Remember Stocks are in most cases riskier than most ETF’s. Our main strategy is to buy the dip of a stock that is trending higher.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

• CAAS –   – Risky – Now or never time to buy Winner exploded to new high, overextended – wait
• PCLN –   Close to 50 day MA support level. A buy the dip stock. Winner exploded to new high – overextended – wait
• F –  . Risky buy now, better on dip. Winner. Over extended now buy the dip
• CSCO,    All these stocks (AMZN & AAPL) are to high above their 50 Day MA, especially apple Wait for dip. Winners All 3 are too far above 50DMA to chase, but buy a dip.
• SHOO –  . Dipping down, but still too overextended. Buy bigger dip. Winner Over extended but could have another 5 -7% dip then run left in it. Risky
• ICON,     a little overextended Buy the dip. Longer term investors wait for bigger dip Winner Way overextended looks like climax run wait for dip
• DGIT –    Traders buy a dip. Investors wait for bigger dip – Winner – Bit overextended traders buy smaller dip Investors bigger dip.
• VCI. Twice dipped to 50 day MA and held, but volume could be better on rally days = riskier. Buy the dip. Winner – Bounced of 50 DMA & at new high – Traders buy smaller and Investors bigger dip
• CREE –  Now dipping. Traders could buy if it dips some more. Investors wait. Big dip then rally, now consolidating, traders buy smaller and investors bigger dip.
• SNDK – Dipping. Traders buy small dips, Investors wait. Winner on earnings news – overextended – wait
• CTRP – . Weak volume small rally then Fell in big volume Rallied in weak volume – Don’t touch – wait

IMAX is Investor’s411 #1 recommended stock. The others are theater chains that benefit from raised 3d ticket prices and attendance. But they are also impacted by overall box office. Therefore IMAX is a more favorable based on the technology.

• *CNK (Cinemark) Too overextended to buy Winner Traders buy smaller dip Investors wait for bigger dip closer to 50DMA
• RGC (Regal Entertainment)  Dipped and rallied yesterday too much volume behind fall wait. Consolidating – Wait for 50 DMA to catch up.
• *IMAX . Traders buy dip Investors wait. UP over +60% since recommended Winner Still pushing higher and overextended – wait
• CKEC (Carmike Cinemas) Overextended.  Wait for bigger dip. Winner Still pushing higher and overextended – wait

32 million new heath care customers (Obama/Pelosi health care bill) means some stocks are going to rally on this increased supply and the growing aging population of baby boomers who need health care. Hopefully long term buys. Will be slow movers relative to other smaller cap stocks.

• *ESRX (Express Scripts) – Slow melt up hopefully this is a long term hold Big dip,big rally – wait. Made higher high & now consolidating – wait.
• *TEVA (Teva Pharmaceuticals)  If you don’t own buy dip at 50 day MA/support Broke through 50 DMA and simply looks like a bad trade. This was bought when it was too far above its 50 DMA – looks lke a mistake.

New Stocks - I’d add more but its very time consuming. Many thanks to Paul R, Monitor and some others who prefer to remain nameless for suggestions.

• VLTR . Closer the dip to 50 Day MA the better the buy Winner, now potential breakout candidate.
• UAUA Dipping in weak volume = good. Traders buy smaller dip Investors wait for 50 day MA Winner if you bought dip closer to 50 DMA. Now, Riskier  buy the dip
• SLAB Classic cup and handle breakout. Even more extended – buy a bigger  dip Dipped Traders buy smaller dip Investors wait. Winner if you bought the dip. Now riskier buy the dip
• MSPD But now that the dust has settled buy the dip. Winner has rallied off 50 DMA. Now riskier buy on dip

Analysis – The McClellan Oscillator was at -37.70 last Tuesday. This Tuesday its at +7.47. Last Tuesday, therefore, was a better time to buy. The closer to -60 the better or more oversold US markets are and the better it is to buy.  So until we dip deep into the red buying stocks is less likely to turn out favorably – make $$$

Lots of winners last week because of a low McClellanOscillator and some good earnings report. Carefull this week a lot of our stocks are over extended and MickyC is higer.

Very rough guesstimate of how much of your odds of successful trade/investment when McClellan Oscillator is at the following levels.

• +60 (overbought) = 25%
• 0 (neutral) = 50%
• -60 (oversold)= 75%

* =  Investors411 has a position in these stocks.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING